Ansip Turns Draft Budget Over to Parliament
In an address made to Parliament as he handed over the government's draft budget for 2013, Prime Minister Andrus Ansip stressed that the nation can't live at the expense of the future.
"The freshly-delivered budget is optimistic, but drafted with responsibility and the bounds of the nation's possibilities in mind,” Ansip said. “Despite the fact that we are doing quite well compared to others, insecurity in the world economy will not permit faster growth in spending.”
Ansip began his speech with a quote from 1926 by then head of state Jaan Teemant, who advocated for decreasing the tax burden, more conservative government spending, and a balanced budget as the prerequisite for economic development.
Today Estonia is on a good path, Ansip said. He noted that, among European countries, it had one of the fastest recoveries from the economic crisis, the fastest economic growth last year (8.3 percent), the largest percentage growth in exports, the biggest drop in unemployment and the lowest public sector debt.
The government's proposed budget bill would raise the public sector salary fund by 4.4 percent.
Both family benefits and pensions would rise by 5 percent, according to the bill, and the unemployment allowance, effective once the more generous unemployment insurance benefit expires, will rise to the minimum monthly wage, from 65 euros to 145 euros per month.
Teachers, who went on strike earlier this year, will see their pay rise by 11 percent on average. Ansip said the most important reforms next year would be in education, alluding in his speech to a campaign promise by pointing out that education spending is proportionally among the top five countries in Europe.
Taxes will remain at current levels, with the exception of a 5 percent hike in the alcohol excise and a reduced unemployment insurance premium.
Asia will be the priority for expanding Estonia's presence abroad in 2013, with the opening of an embassy in New Delhi and a new building for the Beijing embassy.
Pay for Defense Forces personnel will be brought back to the pre-recession levels, and Interior Ministry's pay raises will focus firstly on those who are directly involved with national security. Defense spending will remain at the target 2 percent of GDP, a policy that has won praise from NATO partners.
In agriculture, next year's budget will ensure a smooth transition to a direct subsidies system, officials said.
The Cabinet says the 2013 state budget will be the last where spending will outstrip revenue. Revenue will be 7.5 billion euros, a 2.2 percent increase over this year's figure. Expenditures will be 7.7 billion euros, 1.1 percent higher.
Though the Parliament's Finance Committee has yet to set a date, legislators are expected to debate and vote on the budget by the end of the year.